resignation Archives - Lend Academy

SoFi Co-Founder and CEO Mike Cagney to Step Down by Year End

Shocking news out of SoFi that their CEO is stepping down amid all their recent troubles

September 11, 2017 By Peter Renton 12 Comments

It has been a bad few weeks for SoFi. Back in August there was the news of a sexual harassment lawsuit from a former employee. Before that there had been several senior executive departures, we have had a class action lawsuit and one of Silicon Valley’s most valuable and revered fintech companies was starting to lose some of its luster.

But the truly shocking news came earlier tonight when the Wall Street Journal reported that CEO Mike Cagney was going to step down by the end of the year. He has already stepped down as Chairman, that was effective immediately, and he will step down as CEO by the end of the year.

Existing board member Tom Hutton, managing director of venture capital firm XL Innovate, will take over as executive chairman, effective immediately. Steve Freiburg, another SoFi board member and former CEO of E-Trade will become vice chairman.

In a letter to employees obtained by Lend Academy Mike Cagney said that he had become a distraction for the company:

The combination of HR-related litigation and negative press have become a distraction from the company’s core mission. I want SoFi to focus on helping members, hiring the best people, and growing our company in a way consistent with our values. That can’t happen as well as it should if people are focused on me, which isn’t fair to our members, investors, or you.

The New York Times is also reporting that “Mr. Cagney may have been overaggressive in expanding SoFi’s business, skirting risk and compliance controls.” That is the first I have heard about any compliance issues and if it is true then this could be a much bigger issue for SoFi.

Regardless of the what the real story this is not good for the industry whatsoever. Just when it felt like we had some momentum and the industry was starting to thrive again this is definitely a setback. The press is going to bring up the issues with Lending Club last year and we will have to deal with more negative sentiment.

I have interviewed Mike Cagney twice on the Lend Academy Podcast over the years and I have said many times he is one of the smartest people in all of fintech. And while we don’t know exactly what has gone on inside the company, clearly the board believes that a new leader is needed. Hopefully, they can find an experienced CEO who can right the ship and continue the amazing story that has been SoFi.

Lending Club and Marketplace Lending – One Year On from Renaud Laplanche’s Ouster

We take a look back at lessons learned on the one year anniversary of the ouster of Renaud Laplanche at Lending Club.

May 9, 2017 By Peter Renton 4 Comments

It came as a complete shock to everyone. When I woke up on May 9th last year I could not believe the news I was reading. Renaud Laplanche had been forced to resign from Lending Club, a company that he had founded and where he was the public face.

Back then everyone wondered about the impact this would have on the industry. No one knew what was going to happen but we all expected both Lending Club and the whole industry was going to be in for a rough time. This came at a time when the industry was already experiencing a downturn. Just the week before Prosper had announced layoffs and many other platforms were also struggling to attract investors.

Five Lessons from the Past Year

Today, I thought it would be useful to take a step back and reflect on what we have learned in the past year.

The industry is bigger than one person

While it is true that Renaud Laplanche was an imposing figure in the marketplace lending industry with Lending Club the dominant player, the industry did not fall apart because of his departure. While it made headlines around the world and many industry players saw their struggles increase it did not trigger an industry collapse as many at the time predicted. In fact, we have seen only a handful of small platforms go out of business in the past year and several platforms have continued to grow.

Investors still need yield and borrowers still like installment loans

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Lending Club Founder Renaud Laplanche has Resigned as CEO

An internal review discovered an improper sale of loans to one investor prompting the board to request Renaud Laplanche's resignation

May 9, 2016 By Peter Renton 42 Comments

Former Lending Club CEO Renaud Laplanche on stage at LendIt last month

When I first read the news when I woke up this morning I thought it must have been a joke. The CEO and Founder of Lending Club, Renaud Laplanche, has resigned. But this is not April 1 and it is certainly no joke. The person who has probably had more impact on the growth of this industry than anyone else is no longer CEO of the company he founded – it is effective immediately.

Wow. Just Wow.

There is a press release out this morning with many of the details. The board asked for Renaud’s resignation following the discovery of an improper sale of $22 million in loans to one investor. According to the press release the loans in question departed from the instructions given by this investor. The loans have since been repurchased by the company. But the impropriety did not stop there. From the release:

The review began with discovery of a change in the application dates for $3.0 million of the loans described above, which was promptly remediated. The board also hired an outside expert firm to review all other loans facilitated in the first quarter of 2016 and the firm did not find changes to data in these or other Q1 loans.

The review further discovered another matter unrelated to the sale of the loans, involving a failure to inform the board’s Risk Committee of personal interests held in a third party fund while the Company was contemplating an investment in the same fund. This lack of disclosure had no impact on financial results for the first quarter.